UKX FTSE 100 Index

By Carla Mozee and Victor Reklaitis, MarketWatch

Wage growth slows; stocks hit with loss after 3 days of wins

U.K. stocks closed slightly lower Wednesday, with Burberry Group PLC shares under pressure after financial results, and as investors assessed the prospects for an increase in U.S. interest rates.

The FTSE 100 retreated less than 0.1% to end at 6,165.80, snapping a three-day winning streak (http://www.marketwatch.com/story/ftse-100-rises-as-oil-marches-higher-2016-05-17). (http://www.marketwatch.com/story/ftse-100-rises-as-oil-marches-higher-2016-05-17)

Wednesday's dip followed a slide in U.S. stocks (http://www.marketwatch.com/story/us-stock-futures-seesaw-as-oil-rally-fades-2016-05-17) on Tuesday after two Federal Reserve officials said the central bank could raise interest rates as soon as June (http://www.marketwatch.com/story/fed-officials-stress-that-june-meeting-is-live-2016-05-17). Late Wednesday, investors will look for minutes from the Federal Reserve's April policy meeting, out at 7 p.m. London time, or 2 p.m. Eastern Time.

Mining shares were among Wednesday's biggest decliners, with Anglo American PLC (AAL.LN) closing down 3.6% and Glencore PLC (GLEN.LN) (GLEN.LN) losing 2.6%.

"Natural resources stocks would suffer off the back of a rate hike, as this would not only strengthen the dollar but also push up borrowing costs for many emerging markets," said Tony Cross, market analyst at Trustnet Direct, in a note.

Movers: In London trade, Burberry (BRBY.LN) (BRBY.LN) shares fell 2.7% as the luxury-fashion house posted an 8% decline in yearly profit (http://www.marketwatch.com/story/burberry-tackles-slump-with-cost-cuts-buyback-2016-05-18). The company said it's undertaking a share buyback and a cost-cutting program to save at least 100 million pounds ($144.7 million) a year.

"The ambitious cost-cutting program will be aligned with an attempt to boost productivity, but in the meantime, metrics such as earnings per share and profits have moved in the wrong direction, largely attributed to a challenging environment," particularly in Hong Kong, said Richard Hunter, head of research at Wilson King Investment Management, in a note.

EasyJet PLC (EZJ.LN) finished 3.5% higher at GBP14.87 after RBC raised its price target on the budget airline to GBP15.50 from GBP15.00.

Sterling: The pound powered higher, jumping 1.1% to $1.4610 after poll for the Evening Standard newspaper showed the majority of British voters favor the U.K. staying within the European Union (That%20result%20was%20the%20largest%20lead%20in%20the%20past%20three%20months%20for%20the%20%22Remain%22%20camp,%20the%20Evening%20Standard%20said).

Stocks overall remained lower after the release of U.K. labor-market data. The unemployment rate held steady at 5.1% (http://www.marketwatch.com/story/uk-unemployment-rate-holds-steady-at-51-2016-05-18) in the three months to March. Average weekly earnings excluding bonuses rose 2.1%, compared with 2.2% in the three months through February.

Policy makers at the Bank of England have said they want to see the pace of wage growth pick up if they were to consider raising interest rates. The benchmark interest rate has stood at 0.5%, a record low, since March 2009.

Interest-rate sensitive home builders were higher, with Persimmon PLC (PSN.LN) finishing up 1% and Taylor Wimpey PLC (TW.LN) gaining 1.5%,

(END) Dow Jones Newswires

May 18, 2016 12:33 ET (16:33 GMT)

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